Taking control of your finances involves setting up and sticking to a budget. With greater control on your financial life, you can save more, track and cut out unnecessary spending, pay off debts easily and enjoy greater financial independence.

Being Financially Independent goes beyond having a regular income to cater to your everyday expenses, to having sufficient resources to aid you in your times of need. It involves building a sizeable retirement corpus for yourself to help you maintain your standard of living.

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4 Ways to Become Financially Independent

1. Develop a fund for emergencies

There could be several moving parts in your overall financial picture, which is why it is best to set aside a pool of liquid money for unforeseen circumstances. An emergency fund can cater to you in some of the following situations:
- Job loss
- Major health expenses
- Unforeseen home repairs

To get started on an emergency fund, you can start by investing in fixed deposits. This way, the money is inaccessible even if you are tempted. You can however, liquidate it when faced with an emergency.

2. Spread your investments

No single investment can be singled out as the best, so diversifying your investments is an ideal option. Pick fixed deposits for security and easy liquidity; equity investments for tax-saving and high returns; debt funds and property for long-term security and for earning rental income in future. Various investment options are available, depending on your risk appetite and favoured tenor, so choose wisely. Broadly speaking, you must have a mix of high and low risk investments to maximise your gains.

3. Get the right advice

You immediately consult a specialist when you have an ailment, or a renowned architect when you are building a house. However, professional help is seldom consulted when planning finances. So, take this step and seek advice from an expert.
This will help you secure your financial future in the best way possible. Remember that there will always be divergent views on what works best. Prepare yourself to take a decision based on the information provided to you, for your specific situation and needs.

4. Do your research

Think of your investment portfolio like a cricket team. Every member of the team or each investment vehicle must perform well for your team to win or for your portfolio to grow. For continued growth, adjust your investments over time.
This ensures lucrative earnings and avoids losses due to market fluctuations. To keep your investments on the path to growth, do your research and ask your advisor relevant questions. You can read books or browse the Internet for more investment-related advice, so that you take the right decisions.

Investing is not enough. Watch your investments to ensure that you’re on track to achieving your financial goals. You can bring your financial plans to fruition, as long as you provide for emergencies, diversify your investment portfolio, seek reliable assistance and track your investments.

DISCLAIMER: The mentioned fixed deposit interest rates are indicative only, and may be subject to change periodically. Please check the interest rates on our website.